What is the estimated net salvage value?
Estimated net salvage value refers to the expected state of fixed assets at the expiration or end of their service life, and the amount obtained by an enterprise after deducting the estimated disposal expenses.
Calculation of estimated net residual value
Net salvage value of fixed assets = recoverable salvage value of fixed assets when they are scrapped-the balance after the estimated cleaning expenses.
Estimated net salvage value rate = net salvage value of fixed assets/original value of fixed assets * 100%.
Proportion of estimated net salvage value
It is necessary to estimate the estimated net salvage value of fixed assets before scrapping them. Relevant rules and regulations stipulate that the estimated net salvage value accounts for the proportion of the original value of fixed assets, that is, the estimated net salvage value rate is 3%-5%. If the estimated net salvage value rate of an asset of an enterprise is not within this range, it needs to be adjusted with the approval of relevant departments.
The role of estimated net salvage value
In the process of using fixed assets, due to the changes of economic environment and technical environment, the estimated net residual value of fixed assets may change greatly from the initial estimated net residual value, resulting in the initial estimated net residual value of fixed assets not reflecting the real accounting information. In order to prevent the estimated net salvage value of fixed assets from providing true information, enterprises should review the service life and estimated net salvage value of fixed assets at the end of each year. If it is different from the original estimated net salvage value, the enterprise needs to make adjustments.